Bank of Ipswich v. Brock

• Decision Date: 11 July 1900
• Citation: 83 N.W. 436,13 S.D. 409
• Parties: BANK OF IPSWICH v. BROCK et al.
• Court: South Dakota Supreme Court

83 N.W. 436

13 S.D. 409

BANK OF IPSWICH v. BROCK et al.

Supreme Court of South Dakota

July 11, 1900

Appeal from circuit court, Edmunds county; Loring E. Gaffy, Judge.

Action by the Bank of Ipswich against Neils S. Brock and others. From a judgment in favor of defendants, plaintiff appeals. Reversed.

H. H Potter, for appellant. C. H. Barron and A. Gunderson, for respondent.

CORSON J.

This is an action on the part of the plaintiff for the cancellation of the record of the discharge of a mortgage, and for the foreclosure of the same. The case was tried by the court, and it found the facts and conclusions of law in favor of the defendants and dismissed the action. Counsel for the plaintiff and appellant prepared findings of fact in its favor, which were rejected by the trial court; and appellant insisting that upon the undisputed evidence the findings of fact and conclusions of law should have been in its favor moved for a new trial on the ground that the findings were not supported by the evidence, which was denied.

The undisputed facts may be briefly stated as follows: In May 1884, one Neils S. Brock, who was the owner of certain real estate in Edmunds county, executed a mortgage to G. M. MacKenzie and Elliot H. Smith upon said property to secure the payment of a certain note bearing date May 17, 1884, for the sum of $250. Said note and mortgage were in August, 1884, assigned to Nancy J. Minor. Prior to September, 1887, the said Brock sold and transferred said real estate to the defendant Christian Bungard. Said Bungard and wife on September 26, 1887, executed and delivered to the defendant John Gates two promissory notes, aggregating $650, and to secure the payment of the same executed their mortgage on the real property aforesaid, which said mortgage was made subject to said prior mortgage of $250. On or about May 26, 1889, said Bungard and wife executed and delivered to the plaintiff and appellant a mortgage upon the same property to secure the payment of their promissory note for $500, payable to plaintiff, of which the plaintiff is the owner and holder. At the time said $500 mortgage was executed to the plaintiff the defendant Bungard represented to the plaintiff that he had arranged with said Gates that his mortgage for $650 should be released, and a new mortgage given therefor, subject to the mortgage of the appellant. It was further agreed between said Bungard and the appellant that the $250 mortgage executed by said Brock to MacKenzie and Smith, and by them transferred to Nancy Minor, should be paid off out of the money so secured by the $500 mortgage. Appellant, relying upon said agreement with said Bungard, paid to the holder of the $250 mortgage aforesaid the amount due thereon, and took from such holder a discharge of said mortgage, which discharge was left by the appellant with the register of deeds of said Edmunds county, with instructions not to record the same until a release of the $650 mortgage had been executed and recorded by said Gates. Said register of deeds, however, overlooking the said instructions, recorded the discharge of said Brock mortgage. The Gates mortgage has never been paid or foreclosed, and was at the commencement of this suit still owned and held by said Gates.

Upon these facts the appellant contends that it is entitled to have the discharge of the Brock mortgage for $250 canceled of record, and to be subrogated to the rights of Nancy Minor the assignee of said mortgage, and to foreclose the same. It will be observed from the statement of facts that Gates took the $650 mortgage subject to the $250 mortgage, and that consequently he will be in precisely the same position upon the foreclosure of this mortgage by appellant that he would be if the mortgage was owned by Nancy Minor. It will be further observed that Bungard purchased the property subject to the $250 Brock mortgage, that mortgage being of record at the time of the purchase, and that he will be in precisely the same position upon the foreclosure of the mortgage by appellant that he would be had the mortgage remained the property of said Nancy Minor, and a suit had been instituted by her to foreclose the same. We are of the opinion, therefore, that upon the undisputed facts a part, at least, of the findings proposed by counsel for the appellant should have been adopted as the findings of the court, and the court erred in refusing to find the same. Among the findings so requested and refused by the trial court are the following: "(3) That, at the time of the execution of the note of $500 by Christian Bungard and wife to plaintiff, said Bungard agreed that said mortgage should be a first lien upon the premises described in the complaint, and agreed to obtain from the defendant John Gates a release of his said mortgage." "(5) That the plaintiff, relying upon the promise of said Bungard to discharge and procure a release of the said Gates mortgage, advanced to the then holder of the mortgage made by said Brock to MacKenzie and Smith the amount thereof, and took from said holder a satisfaction of the said mortgage, expecting that the said Gates mortgage would be discharged by said Bungard, and, pending the expected discharge and release of said Gates mortgage, plaintiff delivered said satisfaction to the register of deeds of Edmunds county, with instructions not to record the same until said Gates mortgage was released and satisfied. (6) That the said register of deeds of Edmunds county, contrary to his instructions, placed said satisfaction of record." As these findings are supported by the undisputed evidence in the case, and as the same questions will probably arise on another trial, we may, for the purposes of this decision, assume that they have been found by the court, and, in that view of the case, we are of the opinion that the conclusions of law which the court was requested to state are correct. These conclusions of law are as follows: "(1) That plaintiff is entitled to be subrogated to all the rights of the original mortgagee in said mortgage sought to be foreclosed, and that plaintiff is the owner of said mortgage. (2) That plaintiff is entitled to have the satisfaction of the mortgage delivered by it to the register of deeds of Edmunds county, and which was recorded, set aside, and the record of such satisfaction canceled, and that the same be held null and void. (3) That plaintiff is entitled to a judgment and decree of foreclosure of the mortgage described in the complaint, as prayed, and a...